Effective July 1, 2021, Kentucky has enacted sales tax and utility gross receipts exemptions for certain transactions involving the commercial mining of cryptocurrency. The Kentucky DOR explained the two recently enacted bills here. HB 230 exempts the sale or purchase of electricity used or consumed in the commercial mining of cryptocurrency from sales tax and utility gross receipts tax. “Commercial mining of cryptocurrency” is defined as the process through which blockchain technology is used to mine cryptocurrency at a colocation facility. The facility must consume at least 200,000 kilowatt hours of electricity per month.
SB 255 updated Kentucky’s existing incentive program for energy-related businesses to extend to cryptocurrency facilities making investments over $1 million. Qualifying cryptocurrency facilities are eligible for several incentives, including the new sales tax exemption on all purchases of tangible personal property to construct, retrofit, or upgrade an eligible project, including commercial cryptocurrency mining equipment at a qualifying facility.